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Facebook ended Tuesday, its third day of trading at $31 per share -- $7 less than where it launched on Friday.

It is becoming obvious that those early explanations of Facebook’s middling performance on Friday--it was NASDAQ’s glitchy system’s fault, it was those high-frequency traders, and best of all, the stock deliberately priced just right so there would be no first day pop—just aren’t relevant.

Clearly, investors don’t like Facebook, at least not at this particular price.

But what price would they prefer? Trip Chowdhry, managing director of Equity Research at Global Equities Research, thinks between $15 per share to $18 per share would be a fair valuation. Twenty dollars per share has been tossed about as well.

Another questions investors have been asking themselves is what trajectory the stock will follow (yes, now we know—down—but how quickly?)

Amazon’s Fall from Grace

One theory is that Facebook’s stock will drop in the near term, maybe even by half as Chowdhry thinks it should --- but eventually will claw its way back to $38 per share and then beyond.

That is what happened to Amazon when it went public. It quickly hit $100 per share and then dropped, hovering at subterranean levels for years before working its way back up beyond the $100 price point. Today it is a $200 plus per share stock. That, at least is the theory of Rob Steinberg, co-chair of the Mergers and Acquisitions Group at Jeffer Mangels Butler & Mitchell LLP.

A Disappointment, Then (Some) Redemption

Or possibly it will follow the path of a more recent tech offering, Groupon.

Before its road show the daily deal company could do no wrong. As it made its way to its IPO, though, multiple flaws about its business model emerged – to say nothing of some of its accounting practices. It didn’t take long for investors to become disillusioned, although the company pleasantly surprised shareholders with its more recent earnings.

Just Like Netscape

Or reaching even further back in tech stock history, there is Netscape’s dubious example.

When Andreas Scherer was an executive at the company, he remembers how its stock would fluctuate like clockwork. Netscape would announce a new product feature that would be followed by a rise in the stock. Then the company would announce earnings, investors would be some variation of 1) disappointed or 2) aghast and the stock would promptly drop.

Facebook could follow the same model, Scherer, now managing partner of Salto Partners, says.

(Interestingly, there is talk that Facebook is preparing to launch or pilot two new ad products, according to Chowdhry. One is an ad product interlaced with notifications. Another is a format in which the ad is shown to the user when launching and shutting down a Facebook application. So we may get a chance to test out the Netscape theory sooner than expected.)

Scherer has his theories about what happened on Friday: he thinks the IPO was botched by the underwriter, Morgan Stanley. (Which the New Yorks Times is reporting as well).

“The price point for the stock was too aggressive,” Scherer says. “They put too many shares out.” By doing so, he said, they caused several consequences starting with an inflated stock price that made it difficult for professional fund managers to invest in and ending with a needlessly tarnished image.

But Scherer adds, there are long-term issues as well. “The business model is not fully backed. Certainly it doesn’t scale yet to the numbers they need to justify a $100 billion valuation.”

And thus a vicious circle begins. Management becomes obsessed with growing the top-line—which increases the risk of short-term thinking and, worst, at least for Facebook’s 900 million users, ready-shot-aim tactics. AOL’s pop-up ads would be an example of the latter, Scherer said. Which, now that I think about it, do sound a bit like a notification-linked-to-an-ad format.